It’s no secret that buying a home is a super tax deduction, just like it is no secret that I like Kiplinger magazine. Here is my point in a nutshell. Let’s just say that for the sake of this example you break even on your taxes every year, neither owing nor collecting anything-this is ideally how it should be because owing money brings fees, and getting money back just means you let the gov’t borrow it for a year with 0% return.
You buy a home, and the following year you get $2400 back on your taxes. Here’s what you do…visit your payroll department and change your withholding. Essentially raise the number of exemptions you claim until you are bringing home that extra $200/month. You have accomplished two things. 1) YOU HAVE RAISED YOUR SALARY $200/MONTH and 2) you have stopped lending your money to the gov’t Both super outcomes!
Now this is oversimplified to say the least, but talk to your accountant (or ask for mine – he is awesome!) and they can look at your specific situation (how much you make, how many dependents you have, other deductions, etc.) and give you a more precise calculation. BUT-instead of living rich one month out of the year, your house can raise your standard of living all year round. Here’s to your wealth!